Resilience of industrial sector to help sustain growth in China
Source: Xinhua| 2021-08-13 16:24:02|Editor: huaxia
China's industrial activities are expected to remain robust in the coming months amid government policies to improve industrial chains, leading economic indicators show.
The latest composite leading indicators (CLIs) of the Organization for Economic Cooperation and Development (OECD) pointed to steady growth in China's industrial sector, despite signs of a moderating pace of growth in the OECD area as a whole and in most major economies.
CLIs are designed to anticipate turning points in economic activity six to nine months in advance.
Other leading indicators also signaled resilience in China's economic growth. The country's power consumption, a key barometer of economic activity, expanded by 12.8 percent year on year in July.
Hao Yingjie, secretary-general of the China Electricity Council, expects the country's power consumption to increase by 10 percent to 11 percent year on year for the whole year amid the steady recovery of the economy.
The purchasing managers' index for the manufacturing sector, another forward-looking indicator, came in at 50.4 in July, remaining in the expansion zone despite disruptions to factory activities brought by high temperatures and floods.
The resilience is the result of fine-tuned government policies to ease the pressure of commodity price hikes on firms and offer much-needed financial support to the real economy.
The country has taken a string of measures to contain price increases in iron ore, steel and other commodities, including releasing state reserves into the market and cracking down on market violations. The measures have proved effective in containing commodity prices, alleviating cost pressures on manufacturers.
To further support the real economy, the country's central bank in July cut the reserve requirement ratio for eligible financial institutions, a forward-looking move that took into consideration the tax payment peak, expiring medium-term lending facilities, and the accelerating issuance of local government bonds.
To support the long-term development of the industrial sector, the country has reiterated technological innovations in its industrial policies. A key meeting attended by the country's top policymakers last month stressed the importance of strengthened tech innovations to improving the resilience of industrial and supply chains.
Basic and applied research should be carried out to improve weak links and tackle bottlenecks in the industrial chain, while policy support will be given to small and medium-sized enterprises with expertise in certain fields, the meeting said.
